This year the budget
announcement started by comparing the current NDA regime’s achievement with the
previous UPA government in terms of inflation, the fiscal and current account
deficit and growth. The government has highlighted 9 pillars on which the
budget has been built, namely 1) Agriculture/Farm welfare, 2) Rural focus, 3)
Social healthcare, 4) Education and job creation, 5) Investment to improve
quality of life, 6) Infrastructure focus, 7) Ease of doing business, 8) Fiscal
discipline and 9) Tax reforms.
In this year’s budget,
as was expected, our FM gave his broad attention to the revival of the rural
and agricultural economy by announcing a wide range of financial assistance for
the improvement of the farm and farmers. He acknowledged the need to improve
the irrigation facilities by announcing outlays and promised to bring more land
under irrigation and tried to increase credit facilities by providing interest-rate
subvention. For the agricultural-sector he sought to double farmer’s income in
the next five years through the budget and wanted to electrify all villages by
May, 2018.
FM has launched a
health protection scheme for Rs 1 Lakh cover per family and has introduced
National Dialysis Services Program under National Health Mission. In the Budget
Rs 9000 Crore is earmarked for Swach Bharat Mission. The government has also
said to allocate Rs 1000 Crore for setting-up higher education financing agency.
In the budget our FM has increased allocation to NREGA by more than Rs 38, 000
Crore. The government also wants to develop skills of 1 Crore people in the
next 3 years under PMKVY and seeks to set-up 1500 skill-development institutes
by allocating Rs 1700 Crore.. The total outlay for infrastructure is around Rs
2, 21, 246 Crore. The budget has also approved 100 % FDI in food products
produce and marketed in the country. In the budget HRA has been increased to Rs
60, 000 and tax exemption for income-class below Rs 5 Lakh is increased by Rs
3, 000. The budget has set aside a sum of Rs 25, 000 for recapitalization of
public sector banks. Apart from this FM has also increased taxes on tobacco,
cars and some luxury goods.
In short, this year’s budget looks sound as
far as fiscal restraints are concerned and the FM has resolved to maintain
fiscal-deficit target of 3.5%, but still also maintained to increase
expenditure in case of perverse developments.
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